Recap: Tesla first-quarter results beat expectations

May 6, 2015, 3:32 PM ET

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Tesla Motors Inc. TSLA reported on Wednesday an adjusted net loss of $45 million, or 36 cents a share. That compares with adjusted earnings of 12 cents a share a year ago. The electric-car maker reported a GAAP net loss of $154 million, or $1.22 a share. Both figures include a $22 million loss, or 17 cents a share, to account for a stronger dollar, the company said. Analysts polled by Factset had expected Tesla to report an adjusted first-quarter loss of 50 cents a share. We live-blogged the reaction to the results, and the conference call after the results.

The last quarter was a tough one for Tesla. In February, the company reported an adjusted fourth-quarter loss of 13 cents a share, compared with a gain of 33 cents a share a year earlier and Wall Street expectations of earnings of 30 cents a share.

It also missed sales, reporting $1.095 billion versus expectations of $1.23 billion, and its 2014 delivery goals (to reach its target of delivering 33,000 cars in 2014, Tesla had to deliver more than 11,000 cars; it was able to deliver 9,834.)

Tesla has taken the mystery out of its delivery numbers this time around, though.

In early April, the company surprised markets by saying it had delivered 10,030 Model S sedans in the first quarter, give it or take, compared to its own expectations of delivering 9,500 cars.

It used to be that the company would only report delivery (its proxy for sales) alongside the financial results. That led to a lot of guesswork from analysts and sometimes very different numbers reported by different entities. Other car makers report their sales monthly.

Also high up on investors’ list: updates about the Model 3, the mass-market car Tesla plans to sell in the next two to three years, and the $5 billion battery factory under construction outside Reno, Nev.

Tesla needs plentiful, cheaper batteries out of the Reno “gigafactory” to be able to keep Model 3 costs down and grow its energy storage business.

Tesla has lost—or fired—several key employees in China in recent months, in hopes of jump-starting Tesla’s sales in the Middle Kingdom. Investors will want to know whether the shake-up has improved Tesla’s business in China.

That compares with adjusted earnings of 12 cents a share a year ago. The electric-car maker reported a GAAP net loss of $154 million, or $1.22 a share. Both figures include a $22 million loss, or 17 cents a share, to account for a stronger dollar, the company said.

Analysts polled by Factset had expected Tesla to report an adjusted first-quarter loss of 50 cents a share. The company reported adjusted revenues of $1.1 billion. The analysts surveyed by FactSet had expected sales of $1.04 billion for the quarter, after $713 million a year ago.

“We continue to see growing Model S demand. In Q1, both North American and European orders were much higher than Q1 last year, despite limited availability of 85D and before the announcement of 70D. While we still have work to do in China, we saw encouraging signs of a return to growth in orders there as well.”

“The total addressable market size for Tesla Energy products is enormous and much easier to scale globally than vehicle sales. We are pursuing product certification in multiple markets simultaneously and plan to ramp deliveries in the US, EU and Australia in Q4. When combined with low cost renewable energy, Tesla Energy batteries provide an achievable pathway to a 100% zero carbon energy system.”

“In Q2, we expect to produce about 12,500 vehicles, representing a 12% sequential increase. We plan to deliver 10,000 to 11,000 vehicles in Q2, and we are still on track to deliver approximately 55,000 Model S and X cars in 2015. “

And that last one is the money quote: market was anxious to know whether Tesla was keeping its delivery goals for the year. Remember, folks, it missed 2014.

A bit here about the stronger dollar vs. the euro and other currencies:

“We expect the Model S average transaction price to decline in Q2 as the dollar has strengthened by about 4% against the euro from the time we last adjusted Model S pricing. … We also expect some average price pressure from a less rich product mix, but our continuing efforts to improve efficiency and reduce manufacturing costs should offset this impact on gross margin.”

Not that investors seem to care: shares are still up 2.2% after hours.

“In response to the continued strength of the dollar, we have just announced a price increase of about 5% in most European markets. Since this price increase applies to new orders to be delivered in Q3 and beyond, it will not impact our Q2 results.”

In letter, Tesla says that Powerwall (the stationary battery) will begin at the Tesla factory in Fremont, Calif., and in early 2016 will expand into the ‘gigafactory’ outside Reno, Nev. “and accelerate significantly.”

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